On January 26, 2011, following negotiations between the Guatemalan Government and the Union of Extractive Industries (GREMIEXT), a body which brings together, among others, the companies responsible for the exploitation of minerals in the country, an agreement was reached regarding a voluntary increase in royalties to be paid by these industries to the state according to the type of mineral extracted.
According to a communique published on the site of the Ministry of Energy and Mines (MEM), "The agreement signed by the government of the republic and the Chamber of Industry of Guatemala, which includes the Union of Extractive Industries (GREMIEXT), will allow for the royalties generated by the mining of non-precious metals to be raised from 1 to 3 percent, while those derived of the mining of precious metals (silver and gold) will be raised to 4 percent. The royalties to be paid by Montana Exploradora, for the gross sale of gold and silver, was fixed at 5 percent." The communique explains that the agreement will remain in effect until such time as a new mining law is approved by the Congress. Likewise, it points out that the measure will automatically expire should the price of the minerals in question fall below certain values: in the case of gold, US$975.00 per ounce.
According to a communique published on the site of the Ministry of Energy and Mines (MEM), "The agreement signed by the government of the republic and the Chamber of Industry of Guatemala, which includes the Union of Extractive Industries (GREMIEXT), will allow for the royalties generated by the mining of non-precious metals to be raised from 1 to 3 percent, while those derived of the mining of precious metals (silver and gold) will be raised to 4 percent. The royalties to be paid by Montana Exploradora, for the gross sale of gold and silver, was fixed at 5 percent." The communique explains that the agreement will remain in effect until such time as a new mining law is approved by the Congress. Likewise, it points out that the measure will automatically expire should the price of the minerals in question fall below certain values: in the case of gold, US$975.00 per ounce.
A communique published on the website of the Canadian mining company Goldcorp, Inc. details the terms of the new tax regimen, announcing that "Under the terms of the agreement, the royalty on precious metals will increase from 1% to 4% of gross revenue. These additional royalties will be calculated, paid, and distributed in the same manner as the royalty mandated by Guatemala's Mining Law. This includes the stipulation that 50% of the total royalty will be paid directly to the municipality in which the extraction of the mineral occurs. In addition, Marlin has agreed to pay an additional 1% voluntary royalty, with 80% of this additional royalty to be used to implement the economic development plans of the Municipalities of San Miguel Ixtahuacán and Sipacapa. The remaining 20% will be paid to the Ministry of Energy and Mines and Ministry of Environment Natural Resources, to be used to develop the institutional capacity of those ministries."
Cited in the same communique, Goldcorp president and CEO Chuck Jeannes expressed his satisfaction with the measure. ""This agreement in Guatemala represents a tremendous step forward for
all stakeholders of the Marlin mine,"" he declared. ""The enhanced revenues
generated by the new royalty agreement will enable greater investment
in community development initiatives in the region and foster a strong,
consistent regulatory framework.""
Unsatisfied with the measure, however, social and religious sectors have questioned the agreement reached between the mining companies and the Guatemalan government, signalling that it skirts the root problem and does not take into account the opinion of the population. Referring to the legal mechanisms regulating mining activity, the Bishop of the Diocese of San Marcos, Álvaro Ramazzini, declared that ""There needs to be a revision of these [laws] and establish parameters which respect life and natural resources,"" and that ""The president (Otto Pérez) should listen to the communities and the environmentalists and stop mining exploitation . . . he should not let himself be persuaded by gold's shine."" Cited in the same Prensa Libre article, Rafael Maldonado of the Center for Environmental and Social Legal Action (CALAS) criticized the exclusion of social actors in the negotiations around the new agreement, declaring that ""That only justifies the mistrust, because it's happening behind the people's back.""
En an interview published by the online newspaper Plaza Pública, the former Minister of Energy and Mines under the government of Álvaro Colom, Luis Ferraté, added his voice to the critique, declaring that "Even raising the royalties from one to two, three, five percent has no impact. The mine should give 20 or 30 percent. I do not accept this proposal because it's a way of saying "we're doing something, while the law comes into being, while they do this or that," and this "while" can be years, so no. The population is going to defend its territory."
Introduced to the Congress in November of 2010, a law initiative that would not only permanently raise to a total of 50% of company profits the royalties to be paid by mining companies (25% for the affected municipalities and 25% for the central government), but would also demand full compliance with the Guatemalan state's obligation to obtain the free, prior, informed consent of indigenous peoples before granting licenses for mineral exploitation in their territories, remains in discussion within the Energy and Mines Working Commission of the legislature.
En an interview published by the online newspaper Plaza Pública, the former Minister of Energy and Mines under the government of Álvaro Colom, Luis Ferraté, added his voice to the critique, declaring that "Even raising the royalties from one to two, three, five percent has no impact. The mine should give 20 or 30 percent. I do not accept this proposal because it's a way of saying "we're doing something, while the law comes into being, while they do this or that," and this "while" can be years, so no. The population is going to defend its territory."
Introduced to the Congress in November of 2010, a law initiative that would not only permanently raise to a total of 50% of company profits the royalties to be paid by mining companies (25% for the affected municipalities and 25% for the central government), but would also demand full compliance with the Guatemalan state's obligation to obtain the free, prior, informed consent of indigenous peoples before granting licenses for mineral exploitation in their territories, remains in discussion within the Energy and Mines Working Commission of the legislature.
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